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Video: Was the U.S. spying on Princess Diana?

LONDON — The Central Intelligence Agency was bugging the telephone conversations of Britain’s Princess Diana on the night she died, a British newspaper reported Monday. But current and former U.S. officials told NBC News that intelligence agencies never targeted the late Princess of Wales.

The Observer newspaper, citing the findings of a British inquiry into Diana's death to be released later this week, said the CIA was listening in on the princess in the hours before she died in a car crash in Paris.

The 36-year-old princess, her friend Dodi Fayed, 42, and driver Henri Paul died when their Mercedes crashed inside the Pont d’Alma tunnel Aug. 31, 1997, while being followed by media photographers. The British Broadcasting Corp. reported over the weekend that Paul had three times the French legal limit of alcohol in his blood.

The Observer reported that the CIA did not have British intelligence's permission to tap Diana's phone.

U.S. officials deny allegationsHowever, a Homeland Security official told NBC News it is untrue that the Secret Service ever gathered intelligence information on Diana.

“The Secret Service had nothing to do with it,” the official said.

Separately, a former senior U.S. intelligence official said Diana was never targeted for intelligence gathering in any way. But, the former official said, her voice may have been picked up while others were targeted. Even so, he said that as far as he knows, there were no intercepts of her in Paris the night she died, contrary to British reports.

He also confirmed that there were, indeed, many references to her in the National Security Agency database, some of them innocuous, including references by targets overseas to romantic liaisons with people who the targets thought looked like Diana.

“So if you did a search on her, references like that would show up,” he said.

And he explained that if U.S. officials had learned of any threats to the British royal family, they, too, would have been recorded in the database.

The fact that U.S. intelligence agency files contained references to her has long been known. As far back as 1998, the National Security Agency said in response to a Freedom of Information Act request that it had a Diana file amounting to 1,056 pages.

At the time, NSA officials were quoted as saying the references to her were incidental and that she was never a target.

Report due on Thursday
An official British report into the crash, to be published Thursday, is expected to find Diana's death was an accident, the Observer reported.

The report, by former Metropolitan Police chief John Stevens, also will confirm claims that Paul was drunk and in the pay of the French intelligence services, the Observer said.

Conspiracy theorists have claimed Paul was not drinking that night, contending the blood samples were swapped with blood from someone else who was drunk.

A former judge presiding over the British inquest into Diana’s death said this past week that preliminary hearings would be held in public and not in private, as had been planned, after a protest from Fayed’s father, Mohammed, who owns Harrods department store.

The inquest, convened and then swiftly adjourned in 2004, is due to formally resume next year. Preliminary hearings will be held Jan. 8 and 9 at the Royal Courts of Justice.

Robert Windrem and Pete Williams of NBC News, along with The Associated Press, contributed to this report.